Australia Supports Rio Tinto’s Tomago Aluminium Smelter

Government-Backed Energy Solution for Tomago Aluminium

The Australian government has pledged support to Rio Tinto’s Tomago Aluminium smelter to operate beyond 2028. The plan includes a long-term fixed-price power purchase agreement. This initiative aims to mitigate unsustainable energy costs and ensure continued aluminium production at the 600,000 t/yr plant. Rio Tinto also committed to investing A$1 billion ($670 million) over the next decade, reinforcing its dedication to long-term industrial operations.

Currently, Tomago Aluminium produced 426,000 tonnes from January to September 2025, slightly down 2.2% year-on-year. The company had warned of potential closure after its electricity contract ends in 2028. The energy solution addresses these financial risks while securing jobs and production stability.

Strategic Investment and Industrial Policy Implications

This government-backed deal reflects Australia’s proactive industrial policy to sustain domestic metal production. Federal and New South Wales authorities will collaborate with Rio Tinto to implement the energy strategy. Meanwhile, other aluminium smelters, including Rio Tinto’s 190,000 t/yr Bell Bay facility in Tasmania, may receive similar support through low-carbon production incentives.

Industrial Minister Tim Ayres emphasized that these measures are rational responses to current economic challenges. Previous government packages supporting Whyalla steelworks, Glencore’s Queensland copper, and Nyrstar’s lead and zinc operations illustrate the policy’s broader strategic goals for Australian industrial resilience.

SuperMetalPrice Commentary:

Australia’s intervention at Tomago Aluminium demonstrates a clear strategy to maintain global competitiveness in aluminium production. The fixed-price energy agreement and significant capital investment reduce operational risk, while supporting the transition to low-carbon energy solutions. Globally, this may position Australia as a reliable supplier in the face of fluctuating energy costs and supply chain uncertainties.